The U.S. government already offers a tax credit of $7,500 on eligible EVs to help soften the blow when it comes to pricing, and one congressman wants to further increase that federal tax credit.

Vermont Rep. Peter Welch (D) announced this week that he wants to make it easier for consumers to purchase EVs by increasing the tax credit to $10,000 via the Electric CARS Act.

In addition to boosting the credit by $2,500, it would allow the tax credit to be applied at the point-of-sale instead of when the individual’s taxes are filed. The bill would also be tailored to better accommodate “many middle-income Vermonters do not have enough tax liability to qualify for the full tax credit.”

Vermont Rep. Peter Welch plugging in a Ford Fusion Energi

“One of the biggest contributors to climate change in Vermont and across the country is vehicle emissions. It is essential that we transition to cleaner, more efficient transportation like electric vehicles,” said Rep. Welch said an electric vehicle charging station near the Vermont Statehouse.

“The battery life and fuel efficiency of electric vehicles are steadily improving making them more accessible and practical to drive. This legislation will make them more affordable while saving Vermonters money at the gas pump and reducing their environmental footprint.”

Welch says that he plans to introduce new legislation to increase the EV tax credit when he returns to Washington.

Hey AND we could give everyone some cash so that they could buy only good for the environment products,AND give everyone solar panels for their house,and we could all sing folk songs,and just feel wanted....

From wiki: "A tax credit is a sum deducted from the total amount a taxpayer owes to the state"

That means you still have to earn the money for the whole car by yourself. No one is giving you 10,000$ to buy one. You're just given 10,000$ worth of freedom in how to spend the money you earned when conidering buying an EV.

quote: That means you still have to earn the money for the whole car by yourself. No one is giving you 10,000$ to buy one. You're just given 10,000$ worth of freedom in how to spend the money you earned when conidering buying an EV.

It is still 10K that you don't actually have. It increases your purchasing limit by diverting funds from roads, social programs, education, defense, etc and giving them to auto companies. Those diverted funds need to be made up from somewhere, either in the form of a larger deficit or increased taxes for everyone else.

In the end it amounts to a benefit to wealthier Americans (those in the top 25% tax bracket)and the corporations selling the cars. Households earning less than $70K a year are not buying $40,000+ cars.

quote: My household income is now $120,000/year and I'm not buying $40,000 cars.

Household is $160k and we don't have a $40k car either. The wife's car is new (the other two are 7 and 8 years old) but that's because she won't put more than 120k miles on her daily driver (I wish I could get her to put another 30k miles on a car then I'd get her a used one).

Agreed, it would be much, much better for it to scale based on income with a zero gain after a certain annual amount.

That said, I plan on buying one in the next year based purely on this tax benefit. It will be nearly the same cost as a gasoline model and save me tons on gas. I may not agree with the program, but I'll certainly be taking advantage of it.

Even an EV nut like myself knows gasoline has minimal subsidies attached.

The case for EV tax credits isn't about equalizing subsidies, so don't bother going there. It's that cars stay on the road for 15+ years, but people don't consider gas costs for more than a few of those years (plus environmental benefits, but those are hard to quantify). We let someone pay $7500 less tax because his purchase decision will save future, generally lower income owners of that car $10-20k in gas over a decade (electricity costs a fraction of that to generate), and hurts the trade deficit by a similar amount (affecting jobs, national wealth, etc). It's a win for long term economy.

This proposal? Surprisingly, I'm not really for it. I think a longer term $5k subsidy, once the $7500 expires, is better.

"If you look at the last five years, if you look at what major innovations have occurred in computing technology, every single one of them came from AMD. Not a single innovation came from Intel." -- AMD CEO Hector Ruiz in 2007